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Saturday, April 18, 2015

Weekly: boat limps into harbor

It felt like a very long week, mostly due to the action on Friday. The down move has my boat limping into expiration harbor after
the storm. I survived okay, but it wasn't smooth sailing.

A few
highlights include a new position in JPM, some damage control in XOM,
adding long to FB ahead of earnings. I am up a bit for the week. TSLA
was a lot of the gain, as all five April legs sold on TSLA came in
profitable. UNH earnings came in good, HON not so good.

I'll post the
monthly round up in another day or so. Here are this week's trades (p
= puts, c = calls, all are third week expiration unless noted):

Fri
Sell JPM May 65 c @63.2. I hedge the Jun 60 puts I sold, by selling
May 65 calls on JP Morgan Chase. With a new Star Wars movie trailer in the news, I paraphrase Hans Solo, "I have a bad feeling about this,"
with SPY down hard on news from China.

Sell
HON May 105 c 101.7. Honeywell down after earnings news. The layers
of April options I sold look to be safe, but I have a half position
in shares that I am hedging by selling calls. I bought the shares
when I was short 105 Mar calls and HON went to 106. It hasn't exactly
worked out as planned. Despite some poor timing, I am still up a bit
for 2015 tallying up all the trades for HON.

Sell
UNH May 130 c @119.4. United Healthcare was up on earnings the other
day. I sold some May 110 puts, and am hedging those by selling calls.

Sell
FB AprW4 90 c @81.2. I reduce delta on a complicated position in
Facebook by selling these earning's week calls (earnings out next
week, these are week four options).

Sell
JWN May 82.5 c @77.6. Nordstroms not acting well, lagging the retail
etf, so I am hedging sold puts by selling calls.

Sell
FXI May 58 c @50.0. Hedge sold puts by selling calls on the China
ETF.

Later
in the day, I cover some puts, just in case there is a knife down at
the close. I am in no mood to "dance with
the devil" on expiration day.

Cover
(buy to close) COST Apr 140 p @143.6]

Cover
(buy to close) FB Apr 79.5 p @80.6

Cover
(buy to close) TSLA Apr 197.5 p @204.5.

The market rallies a bit into the close, so my precautionary moves cost me a buck,
two or three on some of these contracts. Rule #1 is live to trade
another day, Ninety minutes ago there was little way to tell if the
closing action would be wild or mild.

Thu
Cover (buy to close) XOM May 82.5 p @87.6. I got head faked
yesterday, closing out short May 90 calls on strength. I decide to
cut my risk and bail from this leg of Exxon Mobil for break even. I
don't have a good feel for XOM at the moment. When in doubt get out.

Sell
UNH May 110 p @121.4. United Healthcare up on earnings. My short
strangles for April look to be safe. I rolled the dice holding
through earnings and rolled a 7. All the April legs look relatively
safe with only one day left and earnings news out.

Wed
Cover (buy to close) XOM May 90 c @88.4. Exxon Mobil up again today.
I cover this leg for about a 300% loss, basis the premium collected.
I am doing this so that the loss from this leg doesn't exceed the
gain from selling other legs, so the overall position comes out okay.
Some might say this is convoluted logic. My thinking is that if my
bad trades tend to be near break even, it will end up as a good year.

Tue
Sell PANW May 165 c @144.2. I hedge my short May 125 puts by selling
calls on Palo Alto Networks. Earnings are after May expiration, and I
don't see it breaking out of its base before then.

Sell
XOM May 82.5 p @87.0. I rebalance short strangles on Exxon Mobil as
it rallies. I am short the May 90 calls, so it is getting a bit
uncomfortable.

Sell
JPM Jun 60 p @63.1. New long position in JP Morgan Chase bank. JPM up
on earning. I like the chart pattern. I am selling puts further out
in time and closer in price than I often do, because the setup looks
very good. I will see if this works or not. When timid traders get a
bit more aggressive, sometimes they get burned.

Mon
Sell TSLA Apr 197.5 p @212.1 Rebalance my position in Tesla Motors
with yet another layers of puts as TSLA creeps higher. My short calls
are a 222.5.

Sell
FB AprW4 74 p @83.4. I add more delta as Facebook moves higher. These
expire after earnings, so implied volatility is elevated. There is a
thick band of support on the chart at 77 and lower. I have a
complicated position in FB, net long.

About Me

I now have two blogs, a piano blog
(link1)
and a stock market blog (link2).

Piano intro: I am a whistle and Irish flute player that started playing piano keyboard in March 2012. Mostly I compose and play my original tunes on my Casio PX-150 digital piano, which I bought in January 2013. I started in 2012 with a Yamaha NP11 keyboard.

Intro for trading blog: I am an individual investor posting a public trading diary. I am not here to give advice. I post my trades and thoughts for public consideration. Mostly it helps to keep myself straight. As of 2012, my favored trades are selling naked puts and strangles.